Currently, many employers offer health care expense account programs in addition to traditional health care insurance. Herein, health care expense account programs are defined as programs which provide an employee and/or employee dependents a designated health care expense account that is assigned to the employee and is used to reimburse the employee for defined eligible health care expenses incurred by the employee and/or the employee's dependents. Examples of currently available health care expense account programs include, but are not limited to: flexible spending accounts (FSAs); health care reimbursement arrangements (HRAs); and health care spending accounts (HSAs).
In many cases, the health care expense account is a virtual account maintained by a health care expense program administrator or management service, also called a program administrator, either under the direct control of the employer or as a third-party agent of the employer. In other cases, the health care expense account is set up by the employees themselves. Typically, health care expense accounts are funded by either by the employee and/or the employer.
Health care expense account programs typically help the employee pay health care expenses that are not covered by the employees health care insurance such as: deductibles; the employee's portion of health care expenses; co-payments for doctors visits and prescriptions; co-payments for medical supplies and devices; extended care and/or home care; and various other health care expenses determined to be eligible by the employer and/or health care expense program administrator and/or the IRS.
In typical operation, funds are deposited in the health care expense account by the employee, the employer, or a combination of both. Once the health care expense account is funded, the funds are made available to reimburse the employee for out of pocket expenses incurred by the employee in eligible health care expense transactions. In most cases, the employee first pays the health care expense using his or her own funds. Then the employee makes a request to the program administrator for reimbursement of the funds. The employee should then eventually be reimbursed for his or her out of pocket expenses from the health care expense account. In other cases, as discussed below, the employee use specially dedicated debit/credit cards that are directly linked to the health care expense account and/or track health care expense transactions. In other cases, the health care expense is paid with specially dedicated debit/credit cards that are directly linked to the health care expense account and then the health care expense must be substantiated using a receipt, bill or explanation of benefits document.
The process above sounds simple enough. However, in reality, the process of making a request to the program administrator for reimbursement of funds typically requires the employee to gather and store documentation, i.e., receipts, invoices, explanation of benefits (EOBs), and/or numerous other documents from various sources, showing, not only that the employee paid the health care expense, but also showing that the health care expense itself was an eligible health care expense. Then, the employee must typically fill out one or more reimbursement request forms to formally request reimbursement. The reimbursement request form(s) must then be submitted by the employee to the program administrator, along with copies of the supporting documentation. For many employees this is a daunting and burdensome task. This is especially true since, in many cases, individual eligible health care expenses are often only a few dollars, such as a $10.00 co-pay for a doctor visit or prescription. However, in many cases, large numbers of individual eligible health care expenses are incurred by the employee and/or the employee's dependents over the course of a year. Consequently, many employees are required to obtain, save, copy, fill out, and submit a burdensome number of documents in order to receive reimbursement for relatively small sums of money. As a result, many employees feel the paperwork burden exceeds the value of the program and the intended employment “benefit” comes to be viewed by the employee as an employment “burden”. This fact serves neither the employee nor the employer's best interests.
In addition, once the employee performs his or her part of the process, the program administrator must now review the reimbursement requests and sort through the copies of the supporting documentation to first identify that a given health care expense was paid by the employee and then verify that the health care expense was an eligible health care expense. This information and documentation, often in the form of paper copies, must then be entered into the program administrator's system, which typically involves redundant data entry and/or processing time.
In most cases, once a given health care expense is identified, authenticated, and verified as an eligible health care expense by the program administrator, and it is determined that the employee has a sufficient balance in the health care expense account to cover the eligible health care expense, then, and only then, is the employee is reimbursed for his or her out of pocket costs associated with the health care expense transaction.
The process described above is not only burdensome and costly to both the employee and program administrator, but is also presents multiple opportunities for the introduction of human error and the introduction of bureaucratic mistakes and inefficiencies. Consequently, neither the employee, the employer, nor the program administrators are well served by the process described above.
As mentioned above, in an effort to mitigate some of the problems described above, some health care expense account programs currently provide dedicated debit/credit cards that are directly linked to the health care expense account and/or track health care expense transactions. In some instances, these dedicated debit/credit cards are used to verify health care expense transactions and, in some cases, directly access health care expense account funds. However, in order to obtain the full benefit of the dedicated debit/credit card, the health care expense must typically be incurred with specific seller/health care providers that have a pre-existing relationship with the health care expense account program administrator. Consequently, programs providing dedicated health care expense account debit/credit cards are, at best, inconvenient in that they require the employee to carry a separate dedicated debit/credit card and, in many cases, highly restrictive in that the debit/credit card is only helpful when used with specific sellers/health care providers.
In other cases, the health care expense is paid with specially dedicated debit/credit cards that is directly linked to the health care expense account and then the health care expense must still be substantiated using a receipt, bill or explanation of benefits document.